On 9/24/11 7:55 PM, Jim Devine wrote: > Her data trick is interesting: if you look at the 1920s and before, > the US data are really poor compared to those of the era after World > War II. Since the data problems were so bad, it's a mistake to > compare, say, the real GDP for the US in 1927 to that of 1957, since > two completely different things are being measured. Most economists > don't want to talk about this. Romer's trick was to say, okay, let's > calculate the 1957 GDP _as if_ all we had was the kind of data of the > type that was available in 1927. Then, since you're using the same > kind of base data to calculate the two GDPs, they are much more > comparable (though of course, data problem remain). > > Her article that made the biggest splash suggested that the US economy > after WW2 was just as prone to gyrations as that before 1929 (or at > least that the two periods were hard to separate from each other in > terms of their instability). This surprising result tells us that the > post-war business about macroeconomic stabilization was but an > illusion. > > The problem is that she should have included the 1930s as part of the > pre-WW2 years. To leave them out simply slants the results to produce > Romer's surprising conclusion. Also, people don't just care about the > fluctuations of real GDP: it's likely that the period before 1929 > involved an economy operating at a higher unemployment rate (on > average) than from World War 2 to 2007 or so. > > In any event, by today's degraded standards, Romer's much more liberal > than most macroeconomists.
Ah, that's why I have remained subbed to PEN-L for nearly 20 years. Just the sort of thing that you can't get anywhere else. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
